Transpacific is undertaking due diligence on the Thiess division and the Australian Competition and Consumer Commission is reviewing the potential deal, with findings scheduled to be announced on July 19.

The company yesterday issued a profit downgrade, saying its full-year underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) would be between $435 million and $442 million, compared with a consensus forecast of $446 million. Statutory profit after income tax is expected to be between $8 million and $13 million, down from $17.3 million previously forecast.

The downgrade is mostly due to a decrease in Cleanaway’s volumes, exacerbated in Queensland by customers deferring the disposal of waste to landfill. However, Mr Campbell said the downgrade would have no bearing on Transpacific’s efforts to purchase Thiess Waste Management. Asked if Transpacific remained in the race for Thiess, Mr Campbell said: “Yes". Offshore groups Sita and Remondis also remain in the race.

According to Transpacific, Queensland customers had deferred the disposal to landfill in the past two months pending the removal of a landfill levy from July this year. “We would expect a good kick [when the levy goes]. [But] we’re not quite certain how much of that business slowdown and how much of it is people holding on to the waste," said Mr Campbell.

Cleanaway represents around 46 per cent of Transpacific’s forecasted 2012 financial year EBITDA, according to Goldman Sachs.

Subdued activity in the manufacturing sector has also hit demand for services provided by the Industrials division. However, the waste group’s contracted municipal work has remained stable, Mr Campbell said.

Goldman Sachs said given the significant weakness reported in manufacturing and housing related stocks in the past three months, the group’s EBITDA downgrade of around 2 per cent was “relatively mild". Transpacific shares closed 2.7 per cent lower to 72¢.